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Report to the Ranking Member, Subcommittee on Oversight of Government
Management, the Federal Workforce, and the District of Columbia,
Committee on Homeland Security and Governmental Affairs, U.S. Senate:
United States Government Accountability Office:
GAO:
January 2008:
Supplemental Appropriations:
Opportunities Exist to Increase Transparency and Provide Additional
Controls:
GAO-08-314:
GAO Highlights:
Highlights of GAO-08-314, a report to the Ranking Member, Subcommittee
on Oversight of Government Management, the Federal Workforce, and the
District of Columbia, Committee on Homeland Security and Governmental
Affairs, U.S. Senate.
Why GAO Did This Study:
Supplemental appropriations laws (supplementals) are a tool for
policymakers to address needs that arise after the fiscal year has
begun. Supplementals provide important and necessary flexibility but
some have questioned whether supplementals are used just to meet the
needs of unforeseen events or whether they also include funding for
activities that could be covered in regular appropriations acts. GAO
was asked to evaluate (1) trends in supplemental appropriations enacted
from fiscal years 1997–2006 and (2) steps that could be taken to
increase transparency and establish additional controls over emergency
supplemental appropriations. Also, GAO consulted with budget experts to
discuss options for reform.
What GAO Found:
The use of supplementals has increased over the last several years,
largely as a result of an increase in Department of Defense (DOD)
funding and the use of supplementals to provide that funding for
activities such as the Global War on Terrorism (GWOT). Over the 10-year
period from fiscal year 1997 through fiscal year 2006, supplemental
appropriations provided about $612 billion ($557 billion net of
rescissions) in new gross budget authority, a five-fold increase over
the previous 10-year period. Ninety-five percent of the total
supplemental funds were appropriated to 11 departments, with DOD
receiving nearly 60 percent of the total. Further, an analysis of the
type of emergency prompting the need for the supplemental shows that
defense-related emergencies received over 50 percent of the emergency-
designated funds. In comparison, 28 percent was to respond to natural
or economic disasters and 16 percent went to antiterror, security, and
post-9/11 activities. International humanitarian assistance, pandemic
influenza, and other activities comprised 3 percent of the total
emergency-designated supplemental funds provided over the 10-year
period.
The majority of the supplemental funds appropriated over this 10-year
period were designated as emergency. Emergency-designated funds do not
have to compete for scarce resources that are constrained by budget
controls. Although Congress has specified criteria for the emergency
designation in Budget Resolutions, these criteria are not self-
executing and there are limited screening and enforcement processes.
The increased use of supplementals raises questions about the current
incentives and controls surrounding their use. GAO reviewed emergency-
designated supplementals and found provisions that were not clearly
consistent with emergency designation criteria or did not contain
sufficient information for us to make a determination. Also, GAO
identified provisions that raise questions about whether supplemental
appropriations bills can become vehicles for funding some activities
that could be covered in the regular budget and appropriations process.
For example, we found $710 million in emergency-designated provisions
that appeared to be unrelated to the event/issue(s) that may have
prompted the supplemental. In addition, we found that 35 accounts
received supplemental appropriations in at least 6 of the 10 years
studied, totaling over $375 billion. Twenty-one of these accounts were
in DOD and the gross budget authority granted to these 21 accounts
($258 billion) comprised over 40 percent of the total gross budget
authority in the supplemental appropriations enacted over the studied
period. Finally, over one-third of the supplemental appropriations
enacted were available until expended (“no-year” funds). Such no-year
funds provide agencies with important flexibility but do not prompt the
annual or periodic Congressional oversight typical of funds that are
available for a fixed amount of time. If the use of supplemental
appropriations is to be limited to addressing unforeseen needs that
arise suddenly after the start of a fiscal year, additional controls
and increased transparency are needed. Budget experts GAO consulted
generally agreed reform was needed but differed on how best to achieve
this.
What GAO Recommends:
To increase transparency and provide additional controls over the use
of supplementals, Congress should consider establishing procedures and
mechanisms to ensure that: (1) emergency-designated provisions meet
established criteria, (2) emergency supplementals do not become the
vehicle for items that do not require the rapid enactment demanded to
respond to an emergency event, (3) supplementals are not used where the
regular budget and appropriations process should suffice, and (4) a
balance exists between flexibility and oversight with regard to the
time availability of funds.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.GAO-08-314]. For more information, contact Susan
J. Irving, 202-512-9142, irvings@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Increased Use of Supplementals is Largely Attributable to Defense
Funding:
Additional Controls Could Reduce the Use of Supplementals and Increase
Opportunities for Oversight:
Options to Control the Use of Emergency Supplementals:
Conclusions:
Matters for Congressional Consideration:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Supplemental Appropriations Laws Enacted from Fiscal Year
1997 through Fiscal Year 2006:
Appendix III: GAO Contacts and Staff Acknowledgments:
Tables:
Table 1: Accounts That Received Supplemental Appropriations in at Least
6 of the 10 Years from Fiscal Years 1997 through 2006:
Table 2: Average Annual and Supplemental Funding for FEMA's Disaster
Relief Fund:
Figures:
Figure 1: Supplemental Gross Budget Authority from Fiscal Years 1981
through 2007:
Figure 2: Departmental Distribution of 95 Percent of the Supplemental
Budget Authority and Rescissions from Fiscal Years 1997 through 2006:
Figure 3: Total Amount of Emergency-and Not Emergency-Designated
Supplemental Budget Authority from Fiscal Years 1997 through 2006:
Figure 4: Emergency-Designated Supplemental Funds by Emergency Type:
Abbreviation List:
BEA: Budget Enforcement Act:
CBO: Congressional Budget Office:
CR: Continuing Resolution:
CRS: Congressional Research Service:
DHS: Department of Homeland Security:
DOD: Department of Defense:
DOI: Department of the Interior:
DOT: Department of Transportation:
Econ. Asst.: Bilateral Economic Assistance:
EOP: Executive Office of the President:
FEMA: Federal Emergency Management Agency:
GWOT: Global War on Terrorism:
HHS: Department of Health and Human Services:
HUD: Housing and Urban Development:
OMB: Office of Management and Budget:
PAYGO: pay-as-you-go:
SAFE: Securing America's Future Economy:
SOS: Stop Over-Spending:
State: Department of State:
USDA: Department of Agriculture:
VA: Department of Veterans Affairs:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
January 31, 2008:
The Honorable George V. Voinovich:
Ranking Member:
Subcommittee on Oversight of Government Management, the Federal
Workforce, and the District of Columbia:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
Dear Senator Voinovich:
Experience shows that the federal government will need to respond to
some level of emergency during a fiscal year. The question is not
whether there will be emergency spending, but rather at what point in
the budget process these funds will be requested and provided. Although
some funding for emergencies is provided through the regular
appropriations process, supplemental appropriations laws
(supplementals) are a tool available to policymakers to address needs
that arise after annual appropriations have been enacted. Just as not
all emergency funding is provided through supplementals, not all
supplementals are for emergencies. Within a single supplemental
appropriations law, some funds may be designated as emergency and
others may not.
Supplementals provide important and necessary flexibility, but some
have questioned whether supplementals are used just to meet the needs
of unforeseen events or whether they also include funding for
activities that could be covered in regular appropriations
acts.[Footnote 1] A Congressional Research Service (CRS) report
concluded that from the expiration of the Budget Enforcement Act of
1990 (BEA) at the end of the fiscal year 2002 through fiscal year 2005,
supplementals net of rescissions[Footnote 2] increased the budget
deficit by almost 25 percent per year.[Footnote 3] Some experts have
also suggested that the increased use of supplementals is symptomatic
of breakdowns in the regular, annual budget and appropriations process
resulting in greater use of supplementals to support federal programs
on an ongoing basis. Both because of the nation's long-term fiscal
challenge and the need for reexamination of the government's
activities, it is increasingly important to consider as much of the
cost of government as possible through the regular budget and
appropriations process, which allows for fuller debate about the trade-
offs between competing claims.
In light of the need for greater budget transparency and improvements
in the budget process overall, you asked that we examine the use of
supplemental appropriations. We were asked to evaluate (1) trends in
supplemental appropriations enacted from fiscal years 1997-2006 and (2)
steps that could be taken to increase transparency and establish
additional controls over emergency supplemental appropriations.
To address the first objective, we developed a database that contained
information from the 25 supplemental appropriations laws that were
enacted from fiscal years 1997-2006 and information from the
Congressional Budget Office (CBO) scoring reports that accompanied
these laws. The database contained both general information about the
laws--such as the public law number and the date of enactment--and
information about individual provisions within the laws such as the
amount of new budget authority granted and the department/agency and
account receiving the funds. For emergency-designated provisions, we
used the provision language and/or other information in the law to
determine what type of emergency or emergencies may have prompted the
funding provision. The categories we developed for this analysis were
as follows: Antiterrorism and Security, Defense-Related, International
Humanitarian Assistance, Natural and/or Economic Disasters (Domestic),
Pandemic Influenza, September 11, 2001, Other, and Not Specified. In
limited cases, these categorizations required some professional
judgment on the part of the analyst.
To address the second objective, we reviewed relevant literature to
identify the rules and guidance that were in place in Congress to
govern the use of supplemental appropriations from fiscal years 1997-
2006. Then, we conducted a content analysis by having two GAO analysts
independently review the information on each emergency-designated
provision in the database to analyze consistency with Congressionally
specified emergency-designation criteria and determine whether the
provision was related to emergency event(s) that may have prompted the
supplemental. For any provision where the two did not come to the same
conclusion, a third GAO analyst reviewed the information and resolved
the discrepancy. We also drew on our analysis of the database and
reviewed existing recommendations and proposals from GAO, CBO, CRS, and
other sources to develop options for addressing the issues we
identified. We then sought opinions from recognized experts in
budgeting practices at the federal level from organizations, such as
the Center on Budget and Policy Priorities, Center for American
Progress, Committee for a Responsible Federal Budget, Committee for
Economic Development, and CBO, as well as knowledgeable former
Congressional staff, on these options. See appendix I for more details
on our scope and methodology.
We conducted this performance audit from November 2006 to January 2008
in accordance with generally accepted government auditing standards.
Results in Brief:
The use of supplementals has increased over the last several years,
largely as a result of an increase in Department of Defense (DOD)
funding and the use of supplementals to provide that funding for
activities such as the Global War on Terrorism (GWOT). Over the 10-year
period from fiscal year 1997 through fiscal year 2006, supplemental
appropriations provided about $612 billion ($557 billion net of
rescissions) in new gross budget authority, a five-fold increase over
the previous 10-year period. The majority of the funds were designated
as emergency. Ninety-five percent of the total supplemental funds were
appropriated to 11 departments, with DOD receiving nearly 60 percent of
the total. Further, an analysis of the type of emergency prompting the
need for the supplemental shows that defense-related emergencies
received over 50 percent of the emergency-designated funds.[Footnote 4]
In comparison, 28 percent was to respond to natural or economic
disasters and 16 percent went to antiterror, security, and post-9/11
activities. International humanitarian assistance, pandemic influenza,
and other activities comprised 3 percent of the total emergency-
designated supplemental funds provided over the 10-year period.
The increased use of supplementals raises questions about the current
incentives and controls surrounding their use. Our analysis indicates
that there are a number of issues to be addressed if the use of
supplementals is to be limited to needs identified after the beginning
of the fiscal year. Although Congress has specified criteria for the
emergency designation in Budget Resolutions, these criteria are not
self-executing and there are limited screening and enforcement
processes. In our review of emergency-designated supplementals, we
found provisions that were not clearly consistent with these criteria
as well as provisions that did not contain sufficient information for
us to make a determination. These appropriations totaled over $31
billion--or about 5 percent of the supplemental appropriations in the
10-year period. We also found that provisions in supplemental
appropriations were not always related to the emergency events that may
have prompted the supplemental, which raises questions about the
potential use of supplementals to fund items that could have been
included in the regular budget and appropriations process.
Specifically, we found over $11 billion in provisions that were not
emergency designated in laws that had provisions with emergency
designations. We also found $710 million in emergency-designated
provisions that appeared to be unrelated to the event/issue(s) that may
have prompted the supplemental and over $12 billion in provisions in
which the relationship to the emergency event/issue(s) that may have
prompted the supplemental was unclear. In addition, we saw a pattern
that indicated that some programs are regularly funded through
supplementals--35 accounts received supplemental appropriations in at
least 6 out of the 10 years we studied. Finally, we found that over
one-third of the supplemental appropriations enacted were available
until expended (referred to as "no-year" funds). Such funds provide
agencies with great flexibility but they do not prompt the annual or
periodic Congressional review and reconsideration typical of funds that
are available for a limited amount of time.
The regular budget and appropriations process provides for greater
legislative deliberation, procedural hurdles, and funding trade-offs
which may be bypassed through the use of supplementals.[Footnote 5] If
appropriations committee oversight and procedural controls over the
enactment of supplementals are less than that applied to the regular
process, there may be an incentive to expand the use of supplementals.
If the use of supplemental appropriations is to be limited to
addressing unforeseen needs that arise suddenly after annual
appropriations have been enacted, additional controls and increased
transparency are needed. To increase transparency and provide
additional controls over the use of supplementals, Congress should
consider establishing procedures and mechanisms to ensure that: (1)
emergency-designated provisions meet established criteria, (2)
emergency supplementals do not become the vehicle for items that do not
require the rapid enactment demanded to respond to an emergency event,
(3) supplementals are not used where the regular budget and
appropriations process should suffice, and (4) a balance exists between
flexibility and oversight with regard to the time availability of
funds.
We consulted individuals with expertise in the budget and
appropriations process and reform proposals to obtain opinions on the
options that led to the matters for Congressional consideration
included in this report. These experts generally agreed that reform was
needed but differed on how best to achieve this. Most of the experts
suggested that the increased use of supplementals is symptomatic of
breakdowns in the regular process--which has resulted in reliance on
supplementals as a way to provide funding for federal activities. Given
this, they expressed doubts about the likelihood of any reform unless a
way was found to return to some "regular order" for the budget and
appropriations process. In general they expressed a desire to reduce
the complexity of the process and so preferred options that did not add
significant procedural hurdles. Most agreed that some limitations on
the time availability of funds--i.e., a turn away from "no-year" funds-
-made sense.
Background:
Supplementals provide additional budget authority for government
activities for the fiscal year already in progress,[Footnote 6] over
and above any funding provided in regular appropriations laws,
continuing resolutions, or omnibus appropriations.[Footnote 7] The
President may also submit to Congress proposed supplemental
appropriations the President decides are necessary because of laws
enacted after the submission of the budget or that are in the public
interest.[Footnote 8] Within a single supplemental appropriations law,
some funds may be designated as emergency and others may not.
Emergency-designated funds do not have to compete for scarce resources
that are constrained by budget controls.
Figure 1 shows the amount of supplemental gross budget authority (i.e.,
before rescissions)[Footnote 9] from fiscal year 1981 through fiscal
year 2007. Although our review focused on supplementals enacted from
fiscal year 1997 through fiscal year 2006, we included data from fiscal
year 1981 through fiscal year 2007 in this figure to provide context.
Figure 1: Supplemental Gross Budget Authority from Fiscal Years 1981
through 2007:
[See PDF for image]
This figure is a vertical bar graph. The vertical axis of the graph
represents dollars in billions from 0 to 180. The horizontal axis of
the graph represents fiscal years from 1981 to 2007. The following data
is approximated from the graphical illustration:
Fiscal year: 1981;
Supplemental gross budget authority: approximately $20 billion.
Fiscal year: 1982;
Supplemental gross budget authority: approximately $25 billion.
Fiscal year: 1983;
Supplemental gross budget authority: approximately $22 billion.
Fiscal year: 1984;
Supplemental gross budget authority: approximately $18 billion.
Fiscal year: 1985;
Supplemental gross budget authority: approximately $17 billion.
Fiscal year: 1986;
Supplemental gross budget authority: approximately $16 billion;
Fiscal year: 1987;
Supplemental gross budget authority: approximately $10 billion.
Fiscal year: 1988;
Supplemental gross budget authority: approximately $1 billion.
Fiscal year: 1989;
Supplemental gross budget authority: approximately $5 billion.
Fiscal year: 1990;
Supplemental gross budget authority: approximately $5 billion.
Fiscal year: 1991;
Supplemental gross budget authority: approximately $50 billion.
Fiscal year: 1992;
Supplemental gross budget authority: approximately $20 billion.
Fiscal year: 1993;
Supplemental gross budget authority: approximately $10 billion.
Fiscal year: 1994;
Supplemental gross budget authority: approximately $$17 billion.
Fiscal year: 1995;
Supplemental gross budget authority: approximately $5 billion.
Fiscal year: 1996;
Supplemental gross budget authority: approximately $3 billion.
Fiscal year: 1997;
Supplemental gross budget authority: approximately $9 billion.
Fiscal year: 1998;
Supplemental gross budget authority: approximately $3 billion.
Fiscal year: 1999;
Supplemental gross budget authority: approximately $13 billion.
Fiscal year: 2000;
Supplemental gross budget authority: approximately $17 billion.
Fiscal year: 2001;
Supplemental gross budget authority: approximately $35 billion.
Fiscal year: 2002;
Supplemental gross budget authority: approximately $50 billion.
Fiscal year: 2003;
Supplemental gross budget authority: approximately $85 billion.
Fiscal year: 2004;
Supplemental gross budget authority: approximately $118 billion.
Fiscal year: 2005;
Supplemental gross budget authority: approximately $160 billion.
Fiscal year: 2006;
Supplemental gross budget authority: approximately $128 billion.
Fiscal year: 2007;
Supplemental gross budget authority: approximately $120 billion.
Source: GAO presentation of CBO data.
Note: CBO totals shown here differ from those generated by GAO
analysis. When scoring appropriations bills, CBO rounds all
appropriations to the nearest million. GAO analysis did not round
appropriations amounts.
[End of figure]
From fiscal year 1981 through fiscal year 1999, fiscal year 1991's
nearly $50 billion stands out even in the absence of a consistent
pattern. Most of the $48.6 billion in supplemental appropriations
provided that year was for the Gulf War. From fiscal year 2000 through
fiscal year 2005, however, the amount grew steadily to a peak of over
$160 billion. The amount in 2006 declined to just over $128
billion.[Footnote 10] For fiscal year 2007, just over $120 billion in
supplemental gross budget authority was appropriated.
As we previously noted, not all emergency funding is provided through
supplementals. CBO has noted that until 1999 virtually all emergency-
designated funds were provided as emergency-designated supplemental
budget authority in response to natural disasters or international
crises. But in the 1999 omnibus appropriation act more than $21 billion
in appropriations were designated as emergencies. That number rose to
$31 billion in 2000. This change illustrates two points of significance
to this study: (1) a change in the way the emergency designation is
used and (2) the fact that emergency funding can be provided through
legislative acts other than supplementals. Although this report focuses
on supplementals and so does not look at emergency-designated funds in
regular appropriations, their existence emphasizes the fact that the
decision on whether to use supplementals and the decisions regarding
the emergency designation are separate.
From fiscal years 1991 through 2002, appropriations were governed by
the provisions of the Budget Enforcement Act of 1990 (BEA),[Footnote
11] which Congress and the President adopted in November 1990 as part
of a multiyear budget agreement. The BEA established statutory limits
on discretionary spending coupled with a "pay-as-you-go" (PAYGO)
requirement designed to ensure that new legislation affecting mandatory
spending or tax revenues did not increase the deficit. The
discretionary spending limits applied to both budget authority and
outlays. If the discretionary appropriations enacted for a given year
caused any of the caps to be exceeded, the President had to order a
sequestration of funds in the category of spending in which the breach
occurred.[Footnote 12]
The BEA did recognize that there would be emergencies for which
Congress and the President would want to provide funds over and above
the amounts envisioned in the discretionary spending caps and provided
a kind of "safety valve." If a provision was designated as "emergency"
by both the President and Congress, the discretionary spending caps
were raised for both the budget authority and outlays associated with
the emergency spending (this is sometimes referred to as being exempted
from the caps).[Footnote 13] Thus, supplemental appropriations
designated as emergency spending did not cause a breach of the caps,
did not trigger a sequestration, and were not required to be offset
with a rescission.[Footnote 14] In addition, BEA treated all
incremental costs associated with Operation Desert Shield as if they
were designated emergency without requiring further action by Congress
and the President. Under the BEA, nonemergency supplementals were
subject to the discretionary spending caps. If a nonemergency
supplemental under consideration by either the House or the Senate
would have exceeded the amount allocated to the applicable budget
function under the budget resolution, the supplemental was subject to a
point of order.[Footnote 15] In practice, however, such points of order
generally were not raised. In some cases, supplemental appropriations
have been protected with waivers of the points of order in both the
House and the Senate.
Although most budget enforcement mechanisms expired in fiscal year
2002, Congress generally has included overall limits on discretionary
spending and exemptions for emergency-designated funding in its Budget
Resolutions.[Footnote 16] In addition, the Budget Resolutions for
fiscal years 2005 and 2006 provided exemptions for all appropriations
related to overseas contingency operations for the Global War on
Terrorism.
Increased Use of Supplementals is Largely Attributable to Defense
Funding:
As figure 1 showed, the use of supplementals has increased over the
last several years. Over the 10-year period from fiscal year 1997
through fiscal year 2006, 25 supplemental appropriations laws were
enacted providing about $612 billion ($557 billion net of rescissions)
in new gross budget authority. In contrast, during the 10 years
immediately preceding this period, $126 billion in gross budget
authority ($86 billion provided net of rescissions) was provided in 39
supplemental appropriations acts. The majority of the supplemental
funds provided from fiscal years 1997 through 2006 received an
emergency designation.
Ninety-five percent of the total supplemental funds were appropriated
to 11 departments, with the DOD receiving nearly 60 percent of the
total (see fig. 2 for the distribution). In comparison, just over 14
percent of the total was appropriated to the Department of Homeland
Security (DHS), with other departments receiving 5 percent or less of
the total supplemental funds. Factoring in rescissions during the same
time period shows that DOD received the most supplemental funds on both
a gross and net basis. Ten percent of the total funds rescinded through
supplementals over this 10-year period were rescinded from DOD. In
contrast, 43 percent of the funds rescinded through supplementals were
rescinded from DHS. When the emergency-designated provisions were
analyzed by the type of emergency prompting the need for the
supplemental, not surprisingly, defense-related emergencies received
over 50 percent of the funds.
Figure 2: Departmental Distribution of 95 Percent of the Supplemental
Budget Authority and Rescissions from Fiscal Years 1997 through 2006:
[See PDF for image]
This figure is a stacked vertical bar graph. The vertical axis of the
graph represents dollars in billions from -50 to +400. The horizontal
axis of the graph represents eleven departments. The following data is
approximated from the graphical illustration:
Department: DOD;
Amount emergency designated: approximately $290 billion;
Amount rescinded: approximately $5 billion;
Amount not emergency designated: approximately $70 billion.
Department: DHS;
Amount emergency designated: approximately $80 billion;
Amount rescinded: approximately $20 billion;
Amount not emergency designated: approximately $8 billion.
Department: Econ. Asst.;
Amount emergency designated: approximately $20 billion;
Amount rescinded: None;
Amount not emergency designated: approximately $5 billion.
Department: HUD;
Amount emergency designated: approximately $15 billion;
Amount rescinded: approximately $8 billion;
Amount not emergency designated: None.
Department: EOP;
Amount emergency designated: approximately $15 billion;
Amount rescinded: None;
Amount not emergency designated: None.
Department: DOT;
Amount emergency designated: approximately $10 billion;
Amount rescinded: approximately $4 billion;
Amount not emergency designated: None.
Department: FEMA;
Amount emergency designated: approximately $9 billion;
Amount rescinded: None;
Amount not emergency designated: None;
Department: HHS;
Amount emergency designated: approximately $8 billion;
Amount rescinded: None;
Amount not emergency designated: None.
Department: USDA;
Amount emergency designated: approximately $6 billion;
Amount rescinded: None;
Amount not emergency designated: None.
Department: State;
Amount emergency designated: approximately $5 billion;
Amount rescinded: None;
Amount not emergency designated: None.
Department: VA;
Amount emergency designated: None;
Amount rescinded: approximately $4 billion;
Amount not emergency designated: None.
Source: GAO analysis of supplemental appropriations laws from fiscal
years 1997-2006.
Notes: Data do not include governmentwide funds or across-the-board
rescissions. DHS was established in March 2003 and subsumed 22 entities
from other departments and agencies, such as the Federal Emergency
Management Agency (FEMA).
[End of figure]
As figure 3 shows, during fiscal years 1997-2006 the vast majority of
supplemental appropriations were emergency designated--over $511
billion of the $612 billion in gross supplemental budget authority.
Fiscal year 2003 stands out with a large amount of funds that were not
emergency designated, primarily targeted to war-related efforts. The
lack of emergency designation for these funds could have been the
result of the close timing between the supplemental request and the
introduction of the fiscal year 2004 Budget Resolution. The Budget
Resolution was written to allow for the war-related supplemental.
Supplemental funding for similar activities was emergency designated in
later years. Although funds that are not emergency designated do not
receive any special budgetary treatment, they may receive less scrutiny
than appropriations made during the regular budget process.
Figure 3: Total Amount of Emergency-and Not Emergency-Designated
Supplemental Budget Authority from Fiscal Years 1997 through 2006:
[See PDF for image]
This figure is a vertical bar graph. The vertical axis of the graph
represents dollars in billions from 0 to 180. The horizontal axis
represents fiscal years from 1997 to 2006. The following data is
approximated from the graphical illustration:
Fiscal year: 1997;
Amount emergency designated: approximately $8 billion;
Amount not emergency designated: approximately $2 billion.
Fiscal year: 1998;
Amount emergency designated: approximately $5 billion;
Amount not emergency designated: approximately $1 billion.
Fiscal year: 1999;
Amount emergency designated: approximately $15 billion;
Amount not emergency designated: approximately $1 billion.
Fiscal year: 2000;
Amount emergency designated: approximately $15 billion;
Amount not emergency designated: approximately $3 billion.
Fiscal year: 2001;
Amount emergency designated: approximately $20 billion;
Amount not emergency designated: approximately $7 billion.
Fiscal year: 2002;
Amount emergency designated: approximately $45 billion;
Amount not emergency designated: approximately $3 billion.
Fiscal year: 2003;
Amount emergency designated: approximately $3 billion;
Amount not emergency designated: approximately $77 billion.
Fiscal year: 2004;
Amount emergency designated: approximately $118 billion;
Amount not emergency designated: approximately $2 billion.
Fiscal year: 2005;
Amount emergency designated: approximately $160 billion;
Amount not emergency designated: approximately $4 billion.
Fiscal year: 2006;
Amount emergency designated: approximately $130 billion;
Amount not emergency designated: approximately $2 billion.
Source: GAO analysis of supplemental appropriation laws from fiscal
years 1997-2006.
[End of figure]
As shown in figure 4, more than 50 percent ($270 billion) of the
emergency-designated supplemental funds were appropriated for defense-
related activities. In comparison, 28 percent was directed to respond
to natural or economic disasters and 16 percent went to antiterror,
security, and post-9/11 activities. International humanitarian
assistance, pandemic influenza, and other activities comprised 3
percent of the total emergency-designated supplemental funds provided
over the 10-year period we studied.
Figure 4: Emergency-Designated Supplemental Funds by Emergency Type:
[See PDF for image]
This figure is a pie-chart depicting the following data:
Defense-related: 53% ($270 billion);
Natural and/or economic disasters (domestic): 28% ($142 billion);
9/11, antiterrorism and security: 16% ($82 billion);
International humanitarian assistance, pandemic influenza, and other
not specified: 3% ($18 billion).
Source: GAO analysis of supplemental appropriations laws from fiscal
years 1997-2006.
[End of figure]
Additional Controls Could Reduce the Use of Supplementals and Increase
Opportunities for Oversight:
Our analysis indicates that there are a number of issues to be
addressed if the use of supplementals is to be limited to needs
identified after the beginning of the fiscal year. Although Congress
has specified criteria for the emergency designation in Budget
Resolutions, these criteria are not self-executing and there are
limited screening and enforcement processes. In our review of
emergency-designated supplementals, we found provisions that were not
clearly consistent with these criteria as well as provisions that did
not contain sufficient information for us to make a determination. We
also found that provisions in supplemental appropriations were not
always related to the emergency events that may have prompted the
supplemental, which raises questions about the potential use of
supplementals to fund items that could have been included in the
regular budget and appropriations process. In addition, we found that a
number of accounts are regularly funded through supplementals, which
may indicate that they are being funded through supplementals in lieu
of the regular budget and appropriations process. Finally, we found
that over one-third of the supplemental appropriations enacted were
available until expended (referred to as "no-year" funds). Such funds
provide agencies with great flexibility but do not prompt the annual or
periodic Congressional review and reconsideration typical of funds that
are available for a limited amount of time.
Emergency-Designation Criteria Are Not Self-Executing and May Not
Always Be Applied:
The term "emergency" is not defined in budget process law. However, in
a 1991 report to Congress, the Office of Management and Budget (OMB)
proposed what it described as a neutral definition of "emergency
requirement," and Congress has included this definition in its Budget
Resolutions. The definition requires that for something to qualify as
an "emergency" all five of the following criteria must be met:
* a necessary expenditure (an essential or vital expenditure, not one
that is merely useful or beneficial);
* sudden (coming into being quickly, not building up over time);
* urgent (a pressing and compelling need requiring immediate action);
* unforeseen (not predictable or seen beforehand as a coming need,
although an emergency that is part of an overall level of anticipated
emergencies, particularly when estimated in advance, would not be
"unforeseen"); and:
* not permanent (the need is temporary in nature).
These emergency criteria, modified slightly, have appeared in several
proposed budget process reform bills. Although none of the proposed
reform bills have been enacted,[Footnote 17] Congress incorporated the
emergency criteria into its Concurrent Budget Resolution in years 2004,
2005, and 2006. In 2003, there was no Concurrent Budget Resolution. We
interpreted the continued appearance of the criteria as a statement of
Congress' general acceptance of the definition.
Critics of the use of the emergency designation cite numerous examples
of funding designated as emergency that they believe meet none of the
criteria listed above. In our review of emergency-designated
supplemental provisions enacted from fiscal years 1997 through 2006, we
found provisions that were not clearly consistent with these criteria
as well as provisions that did not contain sufficient information for
us to make a determination. These provisions totaled over $31 billion-
-or about 5 percent of the supplemental appropriations in the 10-year
period. Specifically, we found 26 provisions with over $6 billion of
the over $500 billion in emergency-designated supplemental funds that
stood out as not being clearly consistent with the emergency-
designation criteria of "sudden" and "unforeseen."[Footnote 18] Most of
these funds were appropriated in preparation for a potential emergency-
-the threat of pandemic influenza. While we do not question the
importance or urgency of the pandemic work, applying the emergency
designation to preparation for future events does raise questions
regarding the application of the "sudden" or "unforeseen" criteria. The
remaining funds were primarily provided for research and development
activities. Although these are a relatively small portion of total
supplemental funding, these examples raise questions about the
credibility of the emergency-designation criteria in the budget
enforcement process.
In addition, nearly $25 billion was provided in emergency-designated
provisions without sufficient explanation for us to determine their
consistency with the emergency-designation criteria. Without further
explanation in individual provisions as to what prompted the emergency
designation, the use of emergency-designated supplemental
appropriations for such activities reduces the transparency of the
emergency designation.
As we have previously reported, since fiscal year 2002 defense-related
funds for GWOT have generally been provided as emergency-designated
funds in either supplementals or a separate title (Title IX) of annual
defense appropriations acts.[Footnote 19] Some have questioned the use
of the emergency designation for the funds provided for the ongoing
military operations related to GWOT--noting that it is problematic for
an ongoing event to be considered "sudden" or "unforeseen." However, we
do not address this in our analysis, because Congress has provided that
some of the funds for overseas contingency operations related to GWOT
can be designated emergency and are exempt from certain points of order
and other budget enforcement provisions. Proponents of the current
approach note that it avoids inflating DOD's "baseline" budget, while
including some funds in the regular appropriations process. Indeed the
question here is more whether these funds should be provided through
supplementals or through the regular budget and appropriations process,
not whether they are designated as emergency. We have previously
encouraged the Administration to include known or likely projected
costs of ongoing operations related to GWOT within DOD's base budget
requests.[Footnote 20] Whether designated emergency or not, continuing
to fund GWOT through supplementals reduces transparency and avoids the
necessary reexamination and discussion of defense commitments and
funding trade-offs.
Provisions in Supplemental Appropriations Were Not Always Related to
Emergency Events That May Have Prompted the Supplemental:
Supplemental appropriations provide funds outside the regular, annual
budget and appropriations process, typically in response to some need,
event, or emergency that may arise after the fiscal year has begun.
Unlike regular appropriation bills, which are under the jurisdiction of
a single appropriations subcommittee in the House and the Senate,
supplemental appropriations may include items under the jurisdiction of
many subcommittees, with varying purposes and levels of urgency. In
considering supplementals, appropriators must grapple with issues of
grouping disparate items, considering emergency and nonemergency items
together, and determining when requests form enough of a "critical
mass" to warrant going forward with a supplemental appropriation bill.
This raises two issues that were confirmed in our analysis.
First, supplementals sometimes contain a mix of emergency-designated
and nonemergency-designated provisions. Over the 10-year period we
examined, 8 of the 25 supplemental appropriations laws that were
enacted combined emergency-designated funding with that which was not
so designated. In total, over $11 billion of the over $279 billion
provided in these laws was not designated as emergency. Emergency-
designated provisions may necessarily be on a fast track--and therefore
receive less scrutiny--to facilitate a rapid response to some emergency
event. Meanwhile, the items that are not emergency designated may
benefit from the urgency of the legislation by avoiding the scrutiny
and trade-offs that are inherent in the regular budget and
appropriations processes.
Second, our analysis showed that some supplementals contain emergency-
designated provisions not related to the event/issue(s) that may have
prompted the need for the supplemental. From fiscal years 1997 through
2006, over $710 million was provided in emergency-designated provisions
found to be unrelated to the emergency that may have prompted the
supplemental. Some of these appeared to be for other emergencies and
some for activities for which the emergency nature was unclear. For
example, $9 million in drought relief was provided in a law entitled
"Emergency Supplemental Appropriations Act for Defense, the Global War
on Terror, and Hurricane Recovery, 2006." In another example, the Coast
Guard received $110 million for a Great Lakes Icebreaker replacement as
part of a $578 million appropriation for the Coast Guard in a section
of law entitled "Kosovo and Other National Security Matters." Although
these sums are small in terms of the aggregate budget, they may be
significant for a given agency or program. In addition, over $12
billion were provided in provisions in which the relationship to the
event/issue(s) that may have prompted the supplemental was unclear. For
example, one section of a law contained provisions with funding for a
myriad of activities--including activities related to stemming illegal
immigration, international health programs, and several highway and
rail improvement projects--that did not provide information to
determine the relationship to the event/issue(s) that prompted the need
for "emergency" funding. The appearance of these provisions in
supplemental appropriations raises the question of whether supplemental
appropriations bills can become vehicles for funding some programs or
activities while avoiding the greater scrutiny and trade-offs that
occur in the regular appropriations process.
Some Accounts Received Supplemental Funding on a Recurring Basis:
Although some supplementals are clearly necessary to provide for costs
that were not contemplated in the regular budget and appropriations
process, many people suspect that the availability of supplemental
appropriations as a funding vehicle may contribute to the underfunding
of some programs in the annual budget and appropriations process and
subsequent funding through supplementals. For activities that regularly
receive emergency-designated supplemental appropriations, there can be
an incentive to provide funding in a supplemental rather than in the
regular appropriations process where these activities would have to
compete with others for limited resources in trade-off decisions. Even
if the funds were emergency designated, including them in the regular
budget and appropriations process provides greater transparency. When
full funding information is not included in the regular budget and
appropriations process, it understates the true cost of government to
policymakers at the time decisions are made and steps can still be
taken to control funding, which is even more important in a time of
constrained resources.
In our review of supplementals over the 10-year period, we found that
35 accounts received supplemental appropriations in at least 6 of the
10 years studied, totaling over $375 billion. The majority of these
accounts fell within DOD. Table 1 details these accounts, the
department in which the accounts reside, and the total new budget
authority the account received over the studied 10-year period. DOD had
21 accounts that received supplemental funds in at least 6 out of the
10 years in question. In addition, the gross budget authority granted
to these 21 DOD accounts ($258 billion) comprised over 40 percent of
the total gross budget authority in supplemental appropriations enacted
over the studied period. Overall, the 35 accounts receiving funds on a
recurring basis accounted for 61 percent of the gross supplemental
budget authority over the 10-year period.
Table 1: Accounts That Received Supplemental Appropriations in at Least
6 of the 10 Years from Fiscal Years 1997 through 2006 (Dollars in
millions):
Department/agency/other: Bilateral Economic Assistance;
Account: Economic Support Fund;
Budget authority: $7,040.
Department/agency/other: Broadcasting Board of Governors;
Account: International Broadcasting Operations;
Budget authority: $107.
Department/agency/other: Department of Agriculture (USDA);
Account: Commodity Credit Corporation Fund;
Budget authority: $3,812.
Department/agency/other: Department of Agriculture (USDA);
Account: Emergency Conservation Program;
Budget authority: $442.
Department/agency/other: Department of Agriculture (USDA);
Account: National Forest System;
Budget authority: $116.
Department/agency/other: Department of Agriculture (USDA);
Account: Watershed and Flood Prevention Operations;
Budget authority: $475.
Department/agency/other: Department of Agriculture (USDA);
Account: Wildland Fire Management;
Budget authority: $936.
USDA total:
Budget authority: $5,781.
Department/agency/other: Department of Defense;
Account: Aircraft Procurement, Air Force;
Budget authority: $1,443.
Department/agency/other: Department of Defense;
Account: Defense Health Program;
Budget authority: $6,621.
Department/agency/other: Department of Defense;
Account: Defense-wide Working Capital Fund;
Budget authority: $5,854.
Department/agency/other: Department of Defense;
Account: Military Construction, Air Force;
Budget authority: $821.
Department/agency/other: Department of Defense;
Account: Military Personnel, Air Force;
Budget authority: $9,502.
Department/agency/other: Department of Defense;
Account: Military Personnel, Army;
Budget authority: $42,361.
Department/agency/other: Department of Defense;
Account: Military Personnel, Marine Corps;
Budget authority: $4,488.
Department/agency/other: Department of Defense;
Account: Military Personnel, Navy;
Budget authority: $4,552.
Department/agency/other: Department of Defense;
Account: Operation and Maintenance, Air Force;
Budget authority: $26,147.
Department/agency/other: Department of Defense;
Account: Operation and Maintenance, Army;
Budget authority: $89,685.
Department/agency/other: Department of Defense;
Account: Operation and Maintenance, Army National Guard;
Budget authority: $798.
Department/agency/other: Department of Defense;
Account: Operation and Maintenance, Army Reserve;
Budget authority: $170.
Department/agency/other: Department of Defense;
Account: Operation and Maintenance, Defense-wide;
Budget authority: $15,652.
Department/agency/other: Department of Defense;
Account: Operation and Maintenance, General (Army Corps of Engineers);
Budget authority: $697.
Department/agency/other: Department of Defense;
Account: Operation and Maintenance, Marine Corps;
Budget authority: $7,318.
Department/agency/other: Department of Defense;
Account: Operation and Maintenance, Navy;
Budget authority: $16,067.
Department/agency/other: Department of Defense;
Account: Other Procurement, Air Force;
Budget authority: $8,793.
Department/agency/other: Department of Defense;
Account: Other Procurement, Army;
Budget authority: $14,349.
Department/agency/other: Department of Defense;
Account: Procurement, Defense-wide;
Budget authority: $2,157.
Department/agency/other: Department of Defense;
Account: Research, Development, Test and Evaluation, Army;
Budget authority: $122.
Department/agency/other: Department of Defense;
Account: Research, Development, Test and Evaluation, Defense-wide;
Budget authority: $1,096.
DOD total:
Budget authority: $258,695.
Department/agency/other: Health and Human Services;
Account: Public Health and Social Services Emergency Fund;
Budget authority: $8,501.
Department/agency/other: Department of Homeland Security;
Account: Disaster Relief;
Budget authority: $89,233.
Department/agency/other: Department of Homeland Security;
Account: Operating Expenses (U.S. Coast Guard);
Budget authority: $1,413.
DHS total:
Budget authority: $90,646.
Department/agency/other: Department of State (State);
Account: Diplomatic and Consular Programs;
Budget authority: $3,118.
Department/agency/other: Department of State (State);
Account: International Narcotics Control and Law Enforcement;
Budget authority: $1,060.
State total:
Budget authority: $4,178.
Department/agency/other: Department of the Interior (DOI);
Account: Construction (U.S. Fish and Wildlife);
Budget authority: $354.
Department/agency/other: Department of the Interior (DOI);
Account: Water and Related Resources;
Budget authority: $78.
DOI total:
Budget authority: $432.
Total:
Budget authority: $375,380.
Source: GAO analysis of supplemental appropriations laws from fiscal
years 1997-2006.
Note: Accounts that have changed department during this time period are
listed under their current department name.
[End of table]
The Federal Emergency Management Agency's (FEMA) Disaster Relief
account repeatedly receives emergency-designated funds through both
supplemental appropriations and the regular annual appropriations
process.[Footnote 21] Funding for FEMA's Disaster Relief account is
shown in table 2.[Footnote 22] This analysis shows that on average the
appropriations FEMA receives through regular appropriations are less
than the average amount received through supplemental appropriations
each year. Even when extraordinary events such as Katrina and 9/11 are
removed, the supplemental appropriations are still of a significant
size relative to the regular annual appropriations.
Table 2: Average Annual and Supplemental Funding for FEMA's Disaster
Relief Fund:
Average appropriations in nominal dollars: 10-year average (1997-06):
Annual: $948,396,100;
Supplemental[A]: $7,287,620,400;
Total: $8,236,016,500.
Average appropriations in nominal dollars: 5-year average (2002-06):
Annual: $1,389,330,600;
Supplemental[A]: $12,286,214,200;
Total: $13,675,544,800.
Averages excluding supplementals for 9/11 and Katrina/Rite in nominal
dollars[B]: 10-year average (1997-06):
Annual: $948,396,100;
Supplemental[A]: $1,226,230,000;
Total: $2,174,626,100.
Averages excluding supplementals for 9/11 and Katrina/Rite in nominal
dollars[B]: 5-year average (2002-06):
Annual: $1,389,330,600;
Supplemental[A]: $834,060,000;
Total: $2,223,390,600.
Source: GAO analysis of FEMA's fiscal year 2008 Congressional Budget
Justification.
[A] Includes release of contingency funds. Contingency funds are
designated by Congress as emergency funds but their use is contingent
on a Presidential designation of an emergency. Also, the supplemental
appropriation for fiscal year 2005 includes $23,409,300,000 of the
fiscal year 2006 rescission.
[B] In this calculation, we subtracted supplemental appropriations for
9/11 ($3,353,133,000 for fiscal year 2001 and $9,037,571,000 for fiscal
year 2002) and Hurricanes Katrina and Rita ($42,223,200,000 for fiscal
year 2005--which also includes $23,409,300,000 of the 2006 rescission-
-and $6,000,000,000 for fiscal year 2006).
[End of table]
The Department of the Interior's Wildland Fire Management account also
receives funds through regular and supplemental appropriations. This
account, like FEMA's Disaster Relief account, received supplemental
funding in at least 6 of the 10 years studied. Regular budget requests
for fire suppression activities are based on a historical 10-year
average of suppression expenditures adjusted for inflation. Previous
GAO work has found that these estimates often fall short of actual
costs. In addition to funds provided through the regular budget and
appropriations process, the Wildland Fire Management account received
at least $936 million in supplemental appropriations over the studied
10-year period.
In FEMA's case, the imbalance between the amounts of appropriations
provided through the annual and supplemental processes is by design.
However, the fact that the imbalance exists even with the removal of
extraordinary events may indicate a need to revisit how much is
provided in the annual process. We have previously reached a similar
conclusion in regards to Wildland Fire Management and the same may be
true for other programs that receive supplemental funds on a recurring
basis. Providing more in the regular appropriations process could
result in less funding through supplementals. Again, when funds are
regularly provided via supplemental appropriations, the true cost of
government is not fully transparent in the regular appropriations
process. Therefore, decision makers may not have full information when
allocating resources.
While No-Year Funds Provide Flexibility, They May Also Limit Periodic
Oversight:
Given the timing of the budget process and the combination of the need
to provide funds promptly with the desire that they be spent in a
thoughtful and targeted manner, it is understandable that supplemental
funds would need to be available beyond the current fiscal year.
Indeed, in the cases of some emergency events it is likely that funding
will need to be available for multiple years. Some funds are available
until expended (referred to as "no-year" funding). Over the 10-year
period we studied, over one-third of the supplemental appropriations
provided (about $209 billion) were available for obligation until
expended.[Footnote 23] These no-year funds provide flexibility but also
limit opportunities for oversight and control. The expiration date of
single or multiyear funds provides an automatic incentive for
revisiting program needs. If the need for funding for a specific
emergency continues for several years, it can be argued that such
funding subsequently could be considered in the regular budget and
appropriations process. No-year funding is available indefinitely and
does not prompt annual or periodic Congressional oversight.
Options to Control the Use of Emergency Supplementals:
We have identified four proposals that could help increase controls
over and transparency of the use of supplementals. These proposals are
intended to ensure the following: (1) emergency-designated provisions
meet established criteria, (2) emergency supplementals do not become
the vehicle for items that do not require the rapid enactment demanded
to respond to an emergency event, (3) supplementals are not used where
the regular budget and appropriations process should suffice, and (4) a
balance exists between flexibility and oversight with regard to the
time availability of funds. We consulted individuals with expertise in
the budget and appropriations process and reform proposals to obtain
opinions on the options that follow. These experts generally agreed
that reform was needed but differed on how best to achieve this. Most
of the experts suggested that the increased use of supplementals is
symptomatic of breakdowns in the regular process--which has resulted in
reliance on supplementals as a way to provide funding for federal
activities. Given this, they expressed doubts about the likelihood of
any reform unless a way was found to return to some "regular order" for
the budget and appropriations process. In general they expressed a
desire to reduce the complexity of the process and so preferred options
that did not add significant procedural hurdles. Most agreed that some
limitations on the availability of funds--i.e., a turn away from "no-
year" funds--made sense.
Codify Emergency-Designation Criteria and Establish New Mechanisms for
Enforcement:
The frequent inclusion of the emergency-designation criteria in Budget
Resolutions would seem to imply Congressional adoption of these
criteria. However our review found some cases where provisions were not
clearly consistent with the emergency-designation criteria and many
cases where provisions did not contain sufficient information for us to
make a determination. These cases raise questions about the credibility
of the emergency-designation criteria in the budget enforcement
process. The fact that they are in resolutions and not in law may
affect the way they are treated. Therefore, codifying these criteria as
an amendment to the Congressional Budget Act should be considered.
However, most of the budget experts we consulted believed this would
make little difference.
Whether or not the criteria are codified, there are a variety of
enforcement approaches that could help decision makers to better weigh
priorities and assess trade-offs. For example, currently the criteria
in Budget Resolutions are not self-enforcing in that they do not
require affirmative action to move forward. Legislative language that
has an emergency designation is subject to a point of order; it
requires a Member (or Members) to make a motion to strike such a
provision. This step is rarely taken; if the point of order is raised
and sustained, then the provision making the emergency designation is
stricken and may not be offered as an amendment from the floor.
Congress could flip the default--requiring an affirmative vote to
provide an emergency designation. Some of the budget experts we
consulted saw merit in this idea, saying it might result in greater
visibility and transparency in the process. Others thought it would
have little impact. Two suggested retaining the current system but
increasing the number of votes needed to overturn or waive any point of
order. Another suggested that the point of order be more narrowly
targeted--that it strike the emergency designation while leaving the
funding provision in the bill. Depending on the statutory or Budget
Resolution-imposed spending limits, such a system could require the
funding to be offset--i.e., to have trade-offs considered more
explicitly.
A related idea would be to require that a statement or narrative
justification describing how the provision meets the emergency criteria
accompany any provisions carrying the emergency designation. Absent
such a justification, the provision would be out of order and could not
be considered without an affirmative vote. Provisions with accompanying
justifications could still be challenged on substantive grounds, but
they would not be subject to a point of order on procedural grounds.
Another approach might be to require explicit review of all emergency-
designated provisions (and proposed amendments that carry such a
designation) by a special House or Senate "Supplementals Subcommittee"
made up of the leadership of the appropriations subcommittees--or their
senior designees--in the relevant body.[Footnote 24] This subcommittee
could provide some consistency in the application of the emergency
criteria. A number of the budget experts whom we consulted found this
worth exploring; a few said it would be important to find a way to
assure prompt consideration of emergency needs. This subcommittee might
require that proposals be accompanied by a narrative justification of
how a proposal meets the emergency criteria.[Footnote 25] One of the
experts suggested the rule might be that if the Supplementals
Subcommittee designated funds as "emergency" and provided an
explanation of how the criteria were met, then there would be no point
of order against the provision or its designation as emergency. This
would not, of course, eliminate the ability of a Member to challenge
the provision on substantive grounds.
Separate the Consideration of Emergency and Nonemergency Items:
In considering supplementals, appropriators must grapple with issues of
grouping disparate items, considering emergency and nonemergency items
together, and determining when requests form enough of a "critical
mass" to warrant going forward with a supplemental appropriations bill.
This raises two issues that were confirmed in our analysis. First,
supplementals sometimes contain a mix of emergency-designated and
nonemergency-designated provisions. Emergency-designated provisions
may necessarily be on a fast track--and therefore receive less
scrutiny--to facilitate a rapid response to some emergency event.
Meanwhile, those provisions that are not emergency designated may
benefit from the urgency of the fast-track legislation by avoiding the
scrutiny and trade-offs that are inherent in the regular budget and
appropriations process. Second, our analysis showed that some
supplementals contain emergency-designated provisions not related to
the event/issue(s) that may have prompted the need for the
supplemental. This raises questions as to whether "emergency"
supplementals are not always used just to meet the needs of unforeseen
emergencies but also include funding for activities that could be
covered in regular appropriations acts, if funded at all.
To address the first of these issues, Congress could consider
establishing two tracks for supplemental appropriations: one for
emergencies and one for nonemergencies. This would permit emergency-
designated funds to proceed on their necessary fast track while
allowing more time for the deliberation of nonemergency items. For
those provisions not designated emergency, the aforementioned
Supplementals Subcommittees could evaluate the necessity for action
through supplementals rather than regular appropriations. One current
legislative proposal suggests an even more stringent approach--a bill
introduced in the House of Representatives on October 16, 2007, to
establish requirements for the consideration of supplemental
appropriation bills (H.R. 3857) proposes that all supplemental
appropriations would have to be emergency designated in accordance with
the emergency-designation criteria.
For emergency-designated supplementals, Congress could change the
budget process to require that all provisions in emergency supplemental
appropriations bills be related to the event/issue(s) that prompted the
supplemental. The Supplementals Subcommittees, if established, could be
tasked with certifying that each supplemental bill and amendments that
offer new areas to be funded meet this requirement. If such a
subcommittee is not established, Congress will need to consider another
enforcement mechanism. Another proposal, again from H.R. 3857, requires
all supplemental appropriations acts to have a single purpose. Under
this proposal, it would not be in order for Congress to consider any
measure making supplemental appropriations for two or more unrelated
emergencies.
Several experts agreed that it made sense to separate emergency and
nonemergency supplementals but questioned how this would be enforced.
In this vein, one expert proposed eliminating the emergency designation
altogether and requiring that all funds be counted under budget caps/
resolutions. Other experts raised concerns that the separation
potentially could slow the supplementals appropriations process.
Experts discussed the need for controls over the timeliness of
supplementals, suggesting that agencies should be required to submit
disaster estimates within a certain period of time after a disaster and
Congress should be required to report a bill related to that disaster a
certain number of days after that. This would help avoid situations
where "emergencies" that occurred 1 or more fiscal years previously
receive emergency-designated supplemental funding. It could also help
to ensure prompt consideration of funding for true emergencies. One
expert, however, saw a real problem with the idea of creating separate
tracks for supplementals, seeing the ability to package them together
as an important legislative power that serves to balance against the
President's veto power.
Provide More Funding in the Regular Budget and Appropriations Process:
Although some supplementals are clearly necessary to provide for costs
that were not contemplated in the regular budget and appropriations
process, many people suspect that the increased use of supplemental
appropriations may contribute to the underfunding of some programs in
the annual budget and appropriations process. We found that 35 accounts
received supplemental appropriations in at least 6 out of the 10 years,
raising questions about whether emergency supplementals are being used
to fund activities that could have been included in regular
appropriations. Many of the experts we asked suggested this tendency to
fund activities through supplementals was a result of overly tight
budget caps/resolutions. Most said that more of the federal
government's costs should be considered through the regular
appropriations process rather than later through supplementals.
However, there was not consensus on the best way to achieve this.
To increase transparency by providing up-front recognition of the
likely call on federal resources for some unforeseen situation,
Congress could take several steps. For example, Congress could require
that accounts that repeatedly receive supplemental appropriations be
funded on a realistic historical average. Although some accounts--such
as FEMA's Disaster Relief and Interior's Wildland Fire Management
accounts--are funded on historical averages, data indicate that the
methodologies used to develop these averages result in amounts that are
frequently insufficient to cover annual costs. In conjunction with
using realistic historical averages, Congress might establish an
emergency reserve fund to fence off funds for extraordinary events that
exceed those historical averages. That fund could be based on a
historical average of all emergency spending, excluding military
actions. The Securing America's Future Economy (SAFE) Act of 2007
includes a proposal for such a fund.
The reserve fund approach has several potential benefits--the use of
emergency reserves may reduce the need for supplemental appropriations,
encourage efforts to avoid or mitigate disasters, and highlight
potential alternatives to federal action, such as state or local
initiatives or private insurance. It also presents pitfalls which would
have to be addressed in the design of the reserve fund. For example,
there may be pressure to use the reserve even if a triggering emergency
does not occur, especially if not all of the funds are needed in a
given year. To mitigate against this, Congress might wish to establish
more specific criteria for the release and use of such funds--the more
specific and measurable the criteria, the more likely there would be
agreement over when the funds can be used. Congress could also use the
Supplemental Subcommittees that we discussed earlier to apply these
criteria and govern the use of the funds.
At least one expert openly supported the idea of an emergency reserve
fund. However, he and several others cautioned that this fund would
need to have explicit controls to determine when funds could be
released to avoid a situation in which the fund is raided when budget
caps/resolutions are unrealistic.
Given the changing nature of the nation's defense challenge, funding
for military actions could be handled separately. Nevertheless, the use
of supplementals could still be limited. The use of the separate title
within DOD's regular appropriations in recent years offers one model.
As our analysis of GWOT funding has shown, however, whether the
separate title model decreases the use of supplementals depends on how
it is used. To date, it has been used as a bridge between the regular
appropriation and a supplemental. However, more funding could be
included in the regular budget and appropriations process in lieu of a
supplemental. In addition, although emergency funding has historically
been used to support unexpected costs of contingency operations, care
needs to be taken with the use of the emergency designation for GWOT
funds.[Footnote 26] Our recent work has shown that changes in DOD's
GWOT funding guidance have resulted in billions of dollars being added
to GWOT funding requests for what DOD calls the "longer war against
terror," making it difficult to distinguish between base costs and the
incremental costs to support specific contingency operations.
Another expert suggested taking a different approach entirely by
separating the concept of "contingency" from that of "reserve fund." He
suggested that both Presidential budgets and Congressional Budget
Resolutions should recognize estimates of uncertainty and
contingencies--both military and natural disaster--in a manner akin to
budget function 920 "allowances."[Footnote 27] This estimate would not
include any real budget accounts or constitute a request for
appropriations. Rather, it would be an amount leading to an alternative
total--a total should these contingencies or emergencies occur. One
approach for this would be to take a 10-or 15-year average of budget
authority for natural disasters and show that as a measure of possible
additional claims on federal resources. The expert analogized this to
insurance--in most years the actual amount needed for emergencies would
be less than this estimate, but in others it might be much more. A
similar process could be established for military contingency
operations. The "allowances" function, or its equivalent, would not
provide funds but would be a way to inform budgetary trade-offs and
decisions by highlighting the fact that there is uncertainty and that
emergency calls on federal resources are likely.
Limit the Legal Availability of Supplemental Appropriations to a Fixed
Period of Time:
Given the timing of the budget process and the combination of the need
to provide funds promptly with the desire that they be spent in a
thoughtful and targeted manner, it is understandable that some
supplemental funds would need to be available beyond the current fiscal
year. Making funds available for obligation beyond the current fiscal
year provides flexibility needed to address uncertainty, especially in
the immediate aftermath of an emergency. However, some funds are
available until expended (referred to as "no-year" funding), which
provides flexibility but reduces opportunities for oversight. As time
passes and requirements become clearer, the need for flexibility
lessens. Limiting the availability of funds to a fixed period of time
would provide Congress the opportunity to revisit funding needs once
better information exists.
Over the 10-year period we examined, over one-third of the supplemental
appropriations enacted were no-year funds. To balance flexibility and
oversight in determining how long funds will be available for
obligation, Congress could consider using single or multiyear funds in
lieu of no-year funds to the maximum extent possible in supplemental
appropriations. Limiting the availability of funds to some fixed period
of time could increase the opportunities for Congressional oversight,
as well as reduce the use of supplementals by moving subsequent funding
requests for past emergencies to the regular budget and appropriations
process.
One concern about limiting the time availability of funds is that
agencies may rush to obligate expiring funds before the end of the
relevant fiscal year. Our work on year-end spending has shown that
problems occurred when budget execution was not monitored effectively.
This can result in a lack of competition, poorly defined statements of
work, inadequately negotiated contracts, and the procurement of low-
priority items or services. However, mechanisms exist to limit year-end
spending. For example, OMB requires that agencies report their
quarterly obligations approximately 20 days after the close of each
calendar year. Moreover, reforms in procurement rules have reduced the
potential magnitude of problems with year-end spending.
Most experts agreed that limiting the availability of funds would allow
for increased Congressional oversight. One expert noted that he could
not think of a reason why no-year funds should be in any part of the
federal budget.
Broad Views Expressed by Experts:
Although individual experts' opinions on these process reform options
varied, there was general agreement that returning to a more limited
use of supplemental appropriations will be challenging. They noted that
the issues surrounding supplemental appropriations stem from a greater
breakdown of and failures in the regular budget and appropriations
process. In addition, many noted that when discretionary budget caps
are unrealistic there is an increased incentive to use supplemental
appropriations. Other experts suggested that it was important to view
supplementals as one piece of a broader system for budgeting for
contingencies, noting that attention given to issues such as disaster
mitigation, emergency reserve funds, government insurance programs, and
realistic funding in the regular budget and appropriations process may
lessen the need for supplemental appropriations.
Conclusions:
To the extent possible, funds should be provided through the regular
appropriations process to ensure that trade-offs are made among
competing priorities, especially in an environment of increasingly
constrained resources. Therefore, controls should be in place to ensure
that emergency supplementals are enacted for their intended purpose--to
address unforeseen needs that arise suddenly after the start of a
fiscal year.
The current incentives and controls surrounding supplemental
appropriations may encourage the use of supplemental appropriations for
items outside of this purpose. Supplementals are frequently "must pass"
legislation with significant incentives for a quick response and are
not subject to the same level of scrutiny and trade-offs as the regular
budget and appropriations process. As a result, supplementals can be an
inviting vehicle for passing legislation that is not directly related
to the emergency that may have prompted the supplemental in the first
place. Furthermore, the greater scrutiny of the regular budget and
appropriations process combined with the expectation of recurring
supplemental funds acts as a disincentive for activities to be fully
funded through regular appropriations.
Additionally, the controls over the process are relatively weak. The
emergency-designation criteria are nonbinding and may be open to
debate. The current governance process over emergency supplementals
requires Members of Congress to take active steps to strike down the
emergency designation--by raising a point of order--as opposed to
requiring affirmation of the designation.
The combination of multiple incentives to use supplementals and
weaknesses in the controls governing their use could encourage
policymakers to use supplemental appropriations in lieu of the regular
appropriations process to fund certain activities.
Matters for Congressional Consideration:
If the use of supplemental appropriations is to be limited, additional
controls and increased transparency are needed. To better target the
resources provided through supplemental appropriations, we recommend
that Congress consider adopting procedures and rules to increase
controls over and transparency of the use of supplementals.
Specifically, we recommend that Congress consider establishing
procedures and mechanisms to ensure that:
1. Emergency-designated provisions meet established criteria by
establishing new mechanisms for enforcement of those criteria, possibly
including codification of the criteria and/or creation of review
procedures.
2. Emergency supplementals do not become the vehicle for items that do
not require the rapid enactment demanded to respond to an emergency
event. Among the approaches to be considered might be separate tracks
for emergency and nonemergency provisions and/or excluding funding for
emergencies that occurred in previous years.
3. Supplementals are not used where the regular budget and
appropriations process should suffice by including a greater share of
funding in the regular appropriations bills.
4. A balance exists between flexibility and oversight with regard to
the time availability of funds by using single or multiyear funds in
lieu of no-year funds to the maximum extent possible in supplemental
appropriations.
As we agreed with your office, unless you publicly announce the
contents of this report earlier, we plan no further distribution of it
until 30 days from the date of this letter. At that time, we will send
electronic copies to others who are interested and copies of this
report will be available at no charge on GAO's Web site at [hyperlink,
http://www.gao.gov].
If you or your staff have any questions about this report please
contact me at (202) 512-9142 or irvings@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff making key contributions to
this report are listed in appendix III.
Sincerely yours,
Signed by:
Susan J. Irving:
Director for Federal Budget Analysis:
Strategic Issues:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
The objectives for this report were to evaluate (1) trends in
supplemental appropriations enacted from fiscal years 1997-2006 and (2)
steps that could be taken to increase transparency and establish
additional controls over emergency supplemental appropriations.
To address the first objective, we developed a database that contained
information from the 25 supplemental appropriations laws that were
enacted from fiscal years 1997-2006 and information from the
Congressional Budget Office (CBO) scoring reports that accompanied
these laws to permit summary analysis of the use of these supplementals
over time. The database contained both general information about the
laws--such as the public law number and the date of enactment--and
information about individual provisions within the laws. Generally a
provision included all of the information contained in a paragraph
under an account name. However, in some instances we used our judgment
to break out or combine information. In general, if a law provided for
several actions under one account header--such as both appropriating
and rescinding funds--we would separate out those actions.
Additionally, if a law provided several amounts to different activities
under one account heading, we might combine those amounts. In total,
the database contained 2,662 provisions.
For each provision, we included in the database the provision text; the
division, title, and/or chapter in which the provision appeared;
information about the entity to which the provision pertained (e.g.,
department, agency, program); and whether or not the provision provided
or rescinded budget authority. If a provision provided new budget
authority, we included the amount, how long it was available, and
whether or not it was emergency designated. If a provision rescinded
budget authority, we noted that and the amount. If a provision did not
provide or rescind budget authority, we developed a very general
description of what it did do (e.g., transfer funds between accounts,
target or limit the use of funds, or amend another law). For emergency-
designated provisions, we used the provision language and/or other
information in the law, such as the title, to determine what type of
emergency may have prompted the supplemental appropriation. The
categories we developed for this analysis were as follows:
* Antiterrorism and Security;
* Defense-Related;
* International Humanitarian Assistance;
* Natural and/or Economic Disasters (Domestic);
* Pandemic Influenza;
* September 11, 2001;
* Other;
* Not Specified[Footnote 28].
In limited cases, these categorizations required some professional
judgment on the part of the analyst. For example, if a provision was in
a law or section of law for war-related activities but specified that
it was providing funds to repair damage from a natural disaster within
the United States, we categorized it as a "Natural and/or Economic
Disaster (Domestic)." However, other funds provided in the same section
of the law that did not contain language specifically relating them to
a natural disaster would have been categorized as "Defense-Related."
From the CBO scoring reports, we input data on the budget function
code,[Footnote 29] the subaccount identification code,[Footnote 30] and
the amount of budget authority provided or rescinded.[Footnote 31]
To address the second objective, we reviewed relevant literature to
identify the rules and guidance that were in place in Congress to
govern the use of supplemental appropriations from fiscal years 1997-
2006. Then, we conducted a content analysis by having two GAO analysts
independently review the information on each emergency-designated
provision in the database to determine consistency with congressionally
specified emergency-designation criteria. Our analysis focused on the
application of the "sudden" and "unforeseen" criteria. We did not
attempt to judge whether provisions were "necessary" or "urgent" as
these are policy judgments, not based purely on objective information.
We also did not make judgments on the "not permanent" criteria as it is
not well defined. There is no time frame given regarding when an
activity has become "permanent." In addition, even "permanent"
activities directed by legislation may cease when legislation is
repealed or amended. The two analysts also determined whether the
provision was related to the event that may have prompted the
supplemental. The two analysts came to different conclusions in 29
instances (2.8 percent of the 1,014 emergency-designated provisions).
For any provision where the two did not come to the same conclusion, a
third GAO analyst reviewed the information and resolved the
discrepancy. Although we had a high initial rate of agreement between
the two independent reviewers, we fully recognize that this was a
subjective judgment and other reviewers could reach different
conclusions than we did given the same information.
We drew on our analysis of all of the information in the database and a
review of existing recommendations and proposals that have been put
forth by GAO, CBO, the Congressional Research Service (CRS) and others
to develop options for addressing the issues that we identified. We
then sought opinions from recognized experts on these options to (1)
determine whether they were appropriate and sufficient and (2) ensure
that they were feasible and practical. To identify people with
expertise in budgeting practices at the federal level, we relied on
sources we had used in our background research and review of
recommendations and proposals that have been put forth by GAO, CBO,
CRS, and others, as well as our experience in this area, to compile a
list of individuals with diverse backgrounds in the field. We sought
comments on a draft document from experts from organizations such as
the Center on Budget and Policy Priorities, Center for American
Progress, Committee for a Responsible Federal Budget, Committee for
Economic Development, and CBO, as well as knowledgeable former
Congressional staff. Six of these people responded to our request.
These comments were summarized and incorporated where appropriate.
We conducted our work in accordance with generally accepted government
auditing standards from November 2006 to January 2008.
[End of section]
Appendix II: Supplemental Appropriations Laws Enacted from Fiscal Year
1997 through Fiscal Year 2006:
Fiscal year 1997:
Public law: 105-18;
Title; 1997 Emergency Supplemental Appropriations for Recovery from
Natural Disasters, and for Overseas Peacekeeping Efforts, Including
Those in Bosnia;
Date enacted: 6/12/1997;
Gross budget authority: Emergency designated: $7,408,906,000;
Gross budget authority: Not emergency designated: $1,528,179,600;
Rescissions: -$8,021,364,000;
Total net budget authority: $915,721,600.
Fiscal year 1998:
Public law: 105-174;
Date enacted: 5/1/1998;
Title: Emergency Supplemental Appropriations and Rescissions, 1998;
Gross budget authority: Emergency designated: $5,447,685,000;
Gross budget authority: Not emergency designated: $688,367,300;
Rescissions: -$2,727,212,234;
Total net budget authority: $3,408,840,066.
Fiscal year: 1999;
Public law: 106-31;
Date enacted: Fiscal year: 5/21/1999;
Title: Emergency Supplemental Appropriations, 1999;
Gross budget authority: Emergency designated: $13,034,288,000;
Gross budget authority: Not emergency designated: $304,821,500;
Rescissions: -$1,998,967,000;
Total net budget authority: $11,340,142,500.
Fiscal year: 1999;
Public law: 106-51;
Date enacted: 8/17/1999;
Title: Emergency Steel Loan Guarantee and Emergency Oil and Gas
Guaranteed Loan Act, 1999;
Gross budget authority: Emergency designated: $0;
Gross budget authority: Not emergency designated: $270,000,000;
Rescissions: -$270,000,000;
Total net budget authority: $0.
Fiscal year: 2000;
Public law: 106-246;
Date enacted: 7/13/2000;
Title: Military Construction, 2001; (Div. B—Emergency Supplemental Act,
2000);
Gross budget authority: Emergency designated: $11,229,933,000;
Gross budget authority: Not emergency designated: $4,342,450,000;
Rescissions: -$403,811,000;
Total net budget authority: $15,168,572,000.
Fiscal year: 2000;
Public law: 106-259;
Date enacted: 8/9/2000;
Title: Department of Defense Appropriations Act, 2001 (Title
IX—Additional Fiscal Year 2000 Emergency Supplemental Appropriations
for the Department of Defense);
Gross budget authority: Emergency designated: $1,779,000,000;
Gross budget authority: Not emergency designated: $0;
Rescissions: $0;
Total net budget authority: $1,779,000,000.
Fiscal year: 2001;
Public law: 107-20;
Date enacted: 7/24/2001;
Title: Supplemental Appropriations Act, 2001;
Gross budget authority: Emergency designated: $0;
Gross budget authority: Not emergency designated: $8,369,251,200;
Rescissions: -$1,825,062,497;
Total net budget authority: $6,544,188,703.
Fiscal year: 2001;
Public law: 107-38;
Date enacted: 9/18/2001;
Title: 2001 Emergency Supplemental Appropriations Act for Recovery from
and Response to Terrorist Attacks on the United States;
Gross budget authority: Emergency designated: $20,000,000,000;
Gross budget authority: Not emergency designated: $0;
Rescissions: $0;
Total net budget authority: $20,000,000,000.
Fiscal year: 2002;
Public law: 107-117;
Date enacted: 1/10/2002;
Title: Department of Defense and Emergency Supplemental Appropriations
for Recovery from and Response to Terrorist Attacks on the United
States, 2002 (2nd $20 billion - 9/11 attacks);
Gross budget authority: Emergency designated: $20,000,000,000;
Gross budget authority: Not emergency designated: $0;
Rescissions: $0;
Total net budget authority: $20,000,000,000.
Fiscal year: 2002;
Public law: 107-206;
Date enacted: 8/2/2002;
Title: 2002 Supplemental Appropriations Act for Further Recovery From
and Response to Terrorist Attacks on the United States;
Gross budget authority: Emergency designated: $25,113,208,000;
Gross budget authority: Not emergency designated: $2,753,250,000;
Rescissions: -$2,549,400,000;
Total net budget authority: $25,317,058,000.
Fiscal year: 2003;
Public law: 108-11;
Date enacted: 4/16/2003;
Title: Emergency Wartime Supplemental Appropriations Act, 2003;
Gross budget authority: Emergency designated: $0;
Gross budget authority: Not emergency designated: $79,188,470,000;
Rescissions: -$3,950,000;
Total net budget authority: $79,184,520,000.
Fiscal year: 2003;
Public law: 108-69;
Date enacted: 8/8/2003;
Title: Emergency Supplemental for Disaster Relief Act, 2003;
Gross budget authority: Emergency designated: $983,600,000;
Gross budget authority: Not emergency designated: year: $0;
Rescissions: $0;
Total net budget authority: $983,600,000.
Fiscal year: 2003;
Public law: 108-83;
Date enacted: 9/30/2003;
Title: Legislative Branch, 2003 (Title III—Emergency Supplemental
Appropriations Act, 2003);
Gross budget authority: Emergency designated: $938,093,000;
Gross budget authority: Not emergency designated: $0;
Rescissions: -$5,500,000;
Total net budget authority: $932,593,000.
Fiscal year: 2004;
Public law: 108-106;
Date enacted: 11/6/2003;
Title: Emergency Supplemental Appropriations Act for Defense and for
the Reconstruction of Iraq and Afghanistan, 2004;
Gross budget authority: Emergency designated: $87,582,898,000;
Gross budget authority: Not emergency designated: $0;
Rescissions: -$35,800,000;
Total net budget authority: $87,547,098,000.
Fiscal year: 2004;
Public law: 108-287;
Date enacted: 8/5/2004;
Title: Department of Defense Appropriations Act, 2005;
Gross budget authority: Emergency designated: $27,656,300,000;
Gross budget authority: Not emergency designated: $611,395,280;
Rescissions: -$111,395,280;
Total net budget authority: $28,156,300,000.
Fiscal year: 2004;
Public law: 108-303;
Date enacted: 9/8/2004;
Title: Emergency Supplemental Appropriations for Disaster Relief Act,
2004;
Gross budget authority: Emergency designated: $2,000,000,000;
Gross budget authority: Not emergency designated: $0;
Rescissions: $0;
Total net budget authority: $2,000,000,000.
Fiscal year: 2005;
Public law: 108-324;
Date enacted: 10/13/2004;
Title: (Division B) Emergency Supplemental Appropriations for Hurricane
Disasters Assistance Act, 2005;
Gross budget authority: Emergency designated: $14,528,337,310;
Gross budget authority: Not emergency designated: $0;
Rescissions: $0;
Total net budget authority: $14,528,337,310.
Fiscal year: 2005;
Public law: 109-13;
Date enacted: 5/11/2005;
Title: Emergency Supplemental Appropriations Act for Defense, the
Global War on Terror, and Tsunami Relief, 2005;
Gross budget authority: Emergency designated: $83,155,316,000;
Gross budget authority: Not emergency designated: $481,738,100;
Rescissions: -$1,581,576,000;
Total net budget authority: $82,055,478,100.
Fiscal year: 2005;
Public law: 109-54;
Date enacted: 8/2/2005;
Title: Department of the Interior, Environment and Related Agencies
Appropriations Act, 2006 (Title VI—Veterans Health Care);
Gross budget authority: Emergency designated: $0;
Gross budget authority: Not emergency designated: $1,500,000,000;
Rescissions: $0;
Total net budget authority: $1,500,000,000.
Fiscal year: 2005;
Public law: 109-61;
Date enacted: 9/2/2005;
Title: Emergency Supplemental Appropriations Act to Meet Immediate
Needs Arising from the Consequences of Hurricane Katrina, 2005;
Gross budget authority: Emergency designated: $10,500,000,000;
Gross budget authority: Not emergency designated: $0;
Rescissions: $0;
Total net budget authority: $10,500,000,000.
Fiscal year: 2005;
Public law: 109-62;
Date enacted: 9/8/2005;
Title: Second Emergency Supplemental Appropriations Act to Meet
Immediate Needs Arising from the Consequences of Hurricane Katrina,
2005;
Gross budget authority: Emergency designated: $51,800,000,000;
Gross budget authority: Not emergency designated: $0;
Rescissions: $0;
Total net budget authority: $51,800,000,000.
Fiscal year: 2006;
Public law: 109-148;
Date enacted: 12/30/2005;
Title: (Division B) Emergency Supplemental Appropriations Act to
Address Hurricanes in the Gulf of Mexico and Pandemic Influenza, 2006
Gross budget authority: Emergency designated: $33,297,714,500;
Gross budget authority: Not emergency designated: $0;
Rescissions: -$34,294,822,000;
Total net budget authority: -$997,107,500.
Fiscal year: 2006;
Public law: 109-174;
Date enacted: 2/19/2006;
Title: Supplemental Appropriations for fiscal year 2006 for the Small
Business Administration’s Disaster Loans Program;
Gross budget authority: Emergency designated: $0;
Gross budget authority: Not emergency designated: $0;
Rescissions: Fiscal year: $0;
Total net budget authority: Fiscal year: $0.
Fiscal year: 2006;
Public law: 109-234;
Date enacted: 6/15/2006;
Title: Emergency Supplemental Appropriations Act for Defense, the
Global War on Terror, and Hurricane Recovery, 2006;
Gross budget authority: Emergency designated: $94,970,111,500;
Gross budget authority: Not emergency designated: $731,960,000;
Rescissions: -$1,272,517,500;
Total net budget authority: $94,429,554,000.
Fiscal year: 2006;
Public law: 109-289;
Date enacted: 9/29/2006;
Title: 2007 Department of Defense Appropriations Act, 2007 (Title X—
Fiscal Year 2006 Wildland Fire Emergency Appropriations);
Gross budget authority: Emergency designated: $200,000,000;
Gross budget authority: Not emergency designated: $0;
Rescissions: $0;
Total net budget authority: $200,000,000.
Source: GAO analysis of supplemental appropriations laws from 1997-
2006.
[End of table]
[End of section]
Appendix III: GAO Contacts and Staff Acknowledgments:
GAO Contact:
Susan J. Irving, (202) 512-9142:
Acknowledgments:
In addition to the individual listed above, Carol Henn, Assistant
Director; Tiffany Mostert; Elizabeth Hosler; Farahnaaz Khakoo; and John
Stradling made significant contributions to this report. Thomas Beall,
Pedro Briones, John Brooks, Carlos Diz, Arthur James, Susan Offutt,
Sheila Rajabiun, John Smale, and Elizabeth Wood also made key
contributions to this report.
[End of section]
Footnotes:
[1] Congressional concern over the use of supplementals is illustrated
by the number of proposals to address their use over the years. See for
example H.R. 853, 106th Cong. (1999), the Comprehensive Budget Process
Reform Act of 1999; S. 3521, 109th Cong. (2006), the Stop Over-Spending
(S.O.S.) Act of 2006; and S.1279, 110th Cong. (2007), the Securing
America's Future Economy Budget Process Reform Act.
[2] A rescission is legislation enacted by Congress that cancels the
availability of budget authority previously enacted before the
authority would otherwise expire.
[3] Congressional Research Service, Supplemental Appropriations:
Trends and Budgetary Impacts Since 1981 (Washington, D.C.: Nov. 2,
2005).
[4] In some cases, DOD funds did not fall into the defense-related
category, typically when the funds were for activities related to
natural disasters.
[5] Of course Congress can use any vehicle--a regular, emergency,
supplemental, or omnibus appropriation act--to enact appropriations,
consistent with its own internal rules.
[6] Budget authority authorizes an agency to enter into financial
obligations that will result in outlays of federal government funds.
Besides providing additional budget authority, supplemental
appropriations acts can also rescind budget authority from previous
appropriations and/or transfer unused budget authority from one account
to another. In this context, a transfer is equivalent to a rescission
from one account and a supplemental appropriation to another account.
Transfers do not affect the budget authority total, but they affect
outlay totals when the programs involved in the transfer spend out at
different rates.
[7] When action on regular appropriation bills is not completed before
the beginning of the fiscal year, a continuing resolution (often
referred to as a "CR") may be enacted to provide funding for the
affected agencies for the full year, up to a specified date, or until
their regular appropriations are enacted. An "omnibus" is an occasional
appropriation measure that combines several regular, annual
appropriations bills into one. From fiscal year 1997 through fiscal
year 2006, the budget process included continuing resolutions and/or
omnibus appropriations in all 10 years.
[8] 31 U.S.C. § 1107.
[9] Under a long-standing budget scorekeeping rule, rescissions are
netted against budget authority to arrive at the budget totals. It can
be argued, however, that budget authority before rescissions is a more
meaningful measure of the effect of supplemental bills on the
obligational authority provided to agencies. According to 1990 and 2001
CBO analyses for 1981-1989 and 1992-2000, much of the rescinded funds
over this period were unlikely to have been spent if they had remained
available, or were scheduled to lapse in the near future.
[10] Since this study focuses on supplementals, it does not include any
emergency-designated funding included in regular appropriations laws.
For example, the fiscal year 2006 and 2007 data do not include the $50
billion and $70 billion respectively in so-called "bridge" funding that
was provided to DOD through a separate title in its regular
appropriations. These funds were intended to fund operations related to
GWOT from the beginning of the fiscal year until a supplemental could
be enacted and were designated as emergency. We did include the $26.8
billion in "bridge" funding for fiscal year 2005 that was provided as
supplemental funding in fiscal year 2004.
[11] BEA amended the Balanced Budget and Emergency Deficit Control Act
of 1985, sometimes referred to as the Gramm-Rudman-Hollings Act. In
this report, the amended Balanced Budget and Emergency Deficit Control
Act of 1985 is referred to as the Budget Enforcement Act, or BEA.
[12] Under BEA provisions, new budget authority, unobligated balances,
direct spending authority, and obligation limitations were
"sequestrable" resources; that is, they were subject to reduction or
cancellation under a presidential sequester order.
[13] In addition to the exemptions for emergency-designated provisions,
all of BEA could be suspended in the event of war or low economic
growth.
[14] Although at times the President and Congress were able to offset
some emergency supplementals with rescissions, the caps are raised by
the full amount of the spending designated as "emergency." Thus, in
effect the rescissions free up funds under the caps.
[15] A point of order is an objection raised on the House or Senate
floor or in committee to an action being taken as contrary to that
body's rules. (Under the Constitution, "Each House [of Congress] may
determine the Rules of its Proceedings." U.S. Const., Art. 1, § 5, cl.
2.) Points of order are limited to the pre-enactment stage. If a point
of order is not raised during consideration of a bill, or is raised and
not sustained, the provision, if enacted, is no less valid. In other
words, a rule or statute subjecting a given provision to a point of
order has no effect or application once the legislation or
appropriation has been enacted.
[16] A concurrent resolution is adopted by both houses of Congress as
part of the annual budget and appropriations process, setting forth an
overall budget plan for Congress against which individual
appropriations bills, other appropriations, and revenue measures are to
be evaluated.
[17] H.R. 853, 106th Cong. (1999), the Comprehensive Budget Process
Reform Act of 1999, for example, was defeated in the House on May 16,
2000, by a vote of 166 to 250.
[18] Our analysis focused on the application of the "sudden" and
"unforeseen" criteria. We did not attempt to judge whether provisions
were "necessary" or "urgent" as these are policy judgments, not based
purely on objective information. We also did not make judgments on the
"not permanent" criterion as it is not well defined. There is no time
frame given regarding when an activity has become "permanent." In
addition, even "permanent" activities directed by legislation may cease
when legislation is repealed or amended.
[19] See GAO, Global War on Terrorism: DOD Needs to Take Action to
Encourage Fiscal Discipline and Optimize the Use of Tools Intended to
Improve GWOT Cost Reporting, GAO-08-68 (Washington, D.C.: Nov. 6,
2007).
[20] See GAO-08-68 and Global War on Terrorism: Observations on
Funding, Costs, and Future Commitments, GAO-06-885T (Washington, D.C.:
July 18, 2006).
[21] FEMA's Disaster Relief appropriation is based on a 5-year average
of noncatastrophic disasters, which FEMA defines as those that receive
less than $500 million in federal aid.
[22] We are currently reviewing how FEMA develops its estimates for the
Disaster Relief account for a report to be issued later this year.
[23] Funding in regular or supplemental appropriations can be made
available for 1 year, multiple years (known as "multiyear" funds), or
until expended.
[24] For many decades, there were subcommittees on supplementals in
both the House and Senate Appropriation Committees. They were known
simply as the Deficiencies Subcommittees and, in later years, the
Subcommittee on Deficiencies and Supplementals. The Deficiencies
Subcommittees provided deficiency appropriations (an appropriation
made to pay obligations for which sufficient funds are not available),
supplemental appropriations, and other appropriations (for judgments of
United States Courts, for example) across multiple bills to many
federal agencies and entities. The Deficiencies Subcommittee dates as
far back as the 45th Congress in 1877. The Deficiencies Subcommittees
were eliminated in the Senate after the 91st Congress and in the House
of Representatives after the 88th Congress (during several Congresses
there was no Deficiency Subcommittee and jurisdiction for deficiencies
and supplementals was exercised by the full Committees on
Appropriations). See U.S. Congressional Research Service,
Appropriations Subcommittee Structure: History of Changes from 1920-
2005, Report No. RL31572, James V. Saturno (Updated Mar. 9, 2005). For
an example of a typical Deficiencies Subcommittee hearing considering
requests for deficiency and supplemental appropriations see First
Deficiency Appropriation Bill, 1926: Hearing Before the House
Subcommittee in Charge of Deficiency Appropriations, 69th Cong. (Jan.
11, 1926 through Jan. 23, 1926); see also H.R. Rep. No. 69-175 (1926)
and First Deficiency Act, Fiscal Year 1926, Pub. L. No. 69-36, 44 Stat.
161 (1926).
[25] Such a requirement was proposed in the Securing America's Future
Economy (SAFE) Budget Process Reform Act (S. 1279), a bill that was
submitted on May 3, 2007.
[26] GAO-08-68.
[27] Budget function 920 allowances are included in budgets to ensure
that totals reflect estimated budget authority and outlay requirements
for future years. They display the budgetary effects of proposals that
cannot be easily distributed across other budget functions because the
precise effects are uncertain, the proposals are not clearly specified,
or they affect multiple functions.
[28] "Other" was used for 30 provisions that we could not include in
the specific categories. "Not specified" means the provision did not
specify a causal event.
[29] Each budget account appears in the single budget function (for
example, national defense or health) that best reflects its major
purpose, an important national need. A function may be divided into two
or more subfunctions, depending upon the complexity of the national
need addressed.
[30] The subaccount code is a CBO code that further describes the funds
in a provision. For example, this code can denote whether a provision
provided emergency-or nonemergency-designated funds or rescinded
funds.
[31] CBO only scores provisions that provide or rescind budget
authority in an amount that rounds to $1 million or more. Therefore, we
did not have CBO information for amounts that were less than $500,000.
[End of section]
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